Bringing electricity closer to consumers through urban microgrids operating in island mode is both technically feasible and economically viable.
Three ingredients are leading to making this a reality:
Global models
The Brooklyn Microgrid in New York was implemented in 2016 as a pilot by LO3 Energy. This was the first blockchain-enabled peer-to-peer energy trading project. This enabled the community to reduce its electricity costs and become independent of the grid.
The Kashiwa-no-ha Smart City in Japan uses distributed energy resources and automatically “islands” itself during grid-level blackouts. There are other examples that the Philippines can emulate.
Based on the experience of these various projects, the three key success factors are:
Regulatory framework
This last point offers a silver lining for the Philippines. The Energy Regulatory Commission
(ERC) has just issued new rules on demand aggregation — the process of pooling the electricity needs of multiple consumers to negotiate better rates or purchase power collectively.
The new regulations enable communities to collaborate and aggregate their demand to at least 500 kW. This means that subdivisions and barangays can aggregate their demand and obtain lower costs, which would open up opportunities for implementing locally based solar generation combined with Battery Energy Storage Systems.
A study I conducted using data from one subdivision with 500 homes —with an aggregate demand of about 4 MW — found potential savings of up to 50 percent. These savings can be achieved through demand aggregation, tapping embedded solar rooftops, adopting a community-based BESS, and allowing peer-to-peer solar exchange.
The last point has recently been permitted by the Department of Energy (DOE), offering a promising outlook for the future.
PH advantage
The Philippines, with its abundant renewable resources, strong community organization (the barangay system), existing cooperative structures, and growing technical capacity, is uniquely positioned to implement this approach.
The country’s geographic fragmentation, while challenging for centralized systems, is actually advantageous for distributed microgrid networks, instilling a sense of pride and confidence in our potential.
Beyond technical and economic benefits, electricity democratization represents a fundamental shift towards community self-determination.
A bold leap
As consumers, we ultimately bear the cost of electricity, making our involvement in the planning, execution, and operation of these power projects not only essential but also integral to their success, empowering us to shape our energy future.
For the Philippines, this transition offers the opportunity to leapfrog outdated centralized models and establish a globally leading example of democratic, community-controlled electricity systems.
With proper policy support, it can be done.
A power industry expert with over 40 years in experience as chief executive officer in firms ranging from banking, power, and advisory services.
